A specific investment
A)is one that can only be used in a transaction with a single firm.
B)is an investment that cannot be physically moved, such as an oil refinery.
C)reduces the possibility of a holdup occurring.
D)is more expensive than a general investment.

Question

Quizplus · Accepted Answer

A specific investment is one that is made with a particular transaction or partner in mind, meaning its value is significantly reduced outside of that specific context. This makes it particularly vulnerable to holdup problems, as the investing party has much to lose if the relationship sours.

A Specific Investment